Friday, January 28, 2011

What's next for virtual goods?

Nowadays,virtual goods market is very hot! Experts predict the sales total will be 2.5 billion by 2013.

And there are tons of information out there about virtual goods itself, and what the days will look at going forward. Particularly, I found the post by Maria Korolov , a few posts by Avril Korman and the "inside virtual goods" report by Justin Smith from Inside Network helped me to better understand the market mechanism and the its future.

I also studied IMVU, which is a site that allow you register an account and start to socialize with others in 3D in just a minute. I found their (or in general this type of company's) business model is very self-sufficient. Users generate content (virtual goods), sell the contents to other users, and they collect the money. Then their job would be to reach to more users, retain existing users and reach to even more users. And that's not easy job!

Based on the limited information and experience I have so far. In the next few years, what I like to see more are (1) creating new ways to partner with real life brand owners (what I mean here are retails, manufacturing companies)(2) grab the non-English speaking market (3) have something to offer for users with different taste and expectation.

Can brand name company produced some kind of virtual goods that are both suitable for selling on the sites and related to the products they sell in real life, and sell it at cheaper price than user created goods? So that they could use social sites as a lab to do product development and nurture their potential customers at the same time. Users probably feel more comfortable with brand names in virtual world just as they do in everyday life.

I found Avril's post on fashion very interesting. Then could company start to being more aggressive in this direction, meaning create more products to just improve user experience in certain categories? Now IMVU have a daily outfit contest, can we have a fashion show, and let user decide what they want to see? And can we work with some young designers as partners to see if we can make their label more aware and more sale. We do revenue share with them. By marketing deeper in certain categories, users will get more involved and addictive. It's a win-win for both sides.

How can anybody forget the other side of the world, the more populated continent and more conservative group of people? Conservative here only means their culture kind of educate them to value group more than themselves. These type of people must have stronger wish to express themselves. And virtual world seems to be an ideal choice for them - people don't know who you are and you can whatever you want without worrying the consequences. So I like to see companies like IMVU grabbing international users as fast as they can. It's going to be an asset with unpredictable value.

Lastly, say I have a user, who has no interest in outfits or the digital sex. But that user really want to climb to a cliff and jump down. It does not mean that user want to kill himself. It simply means he want to have other type experience. Will that type of user find something they want in virtual world too?

No comments:

Post a Comment